Will Technology Open Door to Data/Control Abuse by Utilities, Government, and Hackers?

By TIFFANY MARCH

WASHINGTON (March 05, 2010)—Imagine you left town for a weekend vacation, accidentally leaving the air conditioning set on high. No sweat—you can adjust it with an application on your iPhone.

Or imagine getting to work and realizing you forgot to run the dishwasher. No problem, because another application can start your appliances remotely.

These scenarios may sound far out, but they are almost reality for Maryland residents. Thanks to $10.5 billion in stimulus funds from the federal government, the first stage of "Smart Grid" technology will come to your home as soon as this year.

The idea behind Smart Grid is that each house will have a "Smart Meter" sending and receiving real-time information from utility companies using a radio frequency. So when your home loses power, you won't have to call the utility to complain because the Smart Meter will have already sent out an alert.

"The meter on your house really belongs in the Smithsonian," said Stephen Sunderhauf, who works for PHI, the company that owns Pepco and Delmarva Power.

But some Maryland groups urge caution, arguing that the government hasn't had time to create grid standards yet, the technology is still untested, huge start-up costs will ultimately fall on consumers, and private information about our daily routines could be misused.

Despite these issues, modern electronic devices and renewable energy sources like wind and solar power need a Smart Grid. The electric grid now in use is based on technology from the early 1900s, Sunderhauf said. "The sooner we bring (Smart Grid technology) to our Maryland marketplace, the better off our consumers will be. Embrace the future."

Baltimore Gas and Electric Co. successfully completed a Smart Grid pilot program last year, and Pepco has already begun installing Smart Meters in Delaware, with Maryland to follow soon.

Both companies need the Maryland Public Service Commission's approval before they can install Smart Meters for all customers or use federal stimulus grants for Smart Grid—$200 million for BGE and $168 million for Pepco.

If the commission approves BGE's plan, it will start installing 2 million Smart Meters as soon as this year, finishing by 2014. Pepco has a similar timeline.

Smart Grid advocates say consumers will save money by being able to determine times when energy costs are highest, and choosing to run energy-guzzling appliances during off-peak hours.

Initially, customers should be able to track their energy use after a day's lag time through a Web site. Eventually, customers will have in-home displays with instant information about their energy use and cost.

The administration would like to see customers who are uncomfortable with technology retain regular rates, instead of instituting mandatory "time-of-use" rates, when energy costs more during peak daytime hours, Twomey said.

Another problem is that Smart Grid lacks standards, which must be determined by the National Institute of Standards and Technology, said Theresa Czarski, deputy counsel for the Office of People's Counsel in Baltimore.

"We really felt we were rushed into this (BGE) case because of the federal money," Czarski said, adding that major Smart Grid start-up costs will ultimately fall on consumers.

Czarski is also concerned about privacy.

"(Smart Grid) opens a portal into people's houses," which can be hacked into, she said.

The Future of Privacy Forum also discussed privacy issues in a November 2009 report, suggesting utility companies may be tempted to sell information about customers' energy use.

"It is not yet clear who along the grid will have access to a user's personal information and where on the grid such access will be possible," the report said.

Other Maryland companies are getting on board with Smart Grid.

Eka Systems, a small technology company based in Germantown, makes circuit board nodes for meters that transmit information to the utility company through a radio signal. The company recently helped San Marcos, Texas, upgrade all of its 30,000 meters.

The circuit boards are specially designed to protect information and prevent viruses from spreading, said Michael Van Hall, a marketing analyst with Eka Systems.

"There are certainly are risks, but I think they are inflated a lot of the time," he said.

Lockheed Martin, a major defense contractor based in Bethesda, developed several software programs for Smart Grid. Lockheed was also awarded contracts by Pepco to improve energy efficiency in Maryland, as a first step toward Smart Grid.

"People get nervous about the idea of a utility reaching into their home and turning off their water heater," Easton said, so "the preferred approach is for people to voluntarily sign up for programs."

The current grid is "dumb" by comparison, running near maximum capacity all the time and costing everyone. On hot days when everyone uses air-conditioning, utility companies must purchase extra energy at extremely high rates to meet demand.

If customers can choose their own energy-use programs, it will help utility companies better forecast needs and keep prices lower, said Asher Epstein, managing director of the University of Maryland's Dingman Center for Entrepreneurship.

Epstein joked that companies could even create a "deadbeat power package" so the utility company could prevent television watching for a non-paying customer, while still providing basic services like heat.

Loss of privacy may be the downside, Epstein said.

"The utility company is going to know exactly when you wake up, when you shower, when you wash your clothes. They'll have a very intimate profile of how you live your life." Still, Epstein said utility companies are taking appropriate safeguards.

Most people already have home electronics that send information elsewhere, Easton added, including the Internet and cable TV. "This kind of (utility) information is probably less of a concern and it helps you save money," he said.

Some large cities, like Boulder, Co., and Miami, have already begun major Smart Grid projects, with mixed results. Electricity prices shot up for some users while others saved significantly.

Most experts agree Smart Grid is inevitable in order to fully harness renewable energy sources like wind and solar power, and to support new technology like electric cars.

Now there is no good way to store excess energy—a basic problem because solar power is created during the day and wind power when it's gusty—but an advanced Smart Grid system can store and redistribute energy as needed.

Sunderhauf added that Smart Grid will reduce carbon emissions from power plants and help the state meet Gov. Martin O'Malley's "EmPOWER Maryland" goals to reduce energy consumption 15 percent by 2015 because consumers will learn how to conserve.

A national Smart Grid could even eliminate the need for 180 to 200 new power plants in the next few decades, said Paul Wyman, Lockheed's Smart Grid manager.

Critics and supporters agree the most important next step is teaching people how to make the most of a Smart Grid system.

"As long as there's strong consumer education," Twomey said, "people will be so much more empowered."